Bloomberg's economists are penciling in a 2.1 percent gain for U.S. GDP in the April–June quarter, the strongest stretch of growth we've seen all year. After that, they expect growth to slow sharply, slipping to around 0.8 percent in the fall before clawing back to about 1.1 percent by year-end.
Surprisingly, consumers didn't blink amid trade tensions and tariff worries. The core PCE index popped 0.2 percent in May, more than analysts had forecast, which tells us people kept spending and prices stayed a touch firmer than the Fed would like.
That stickier inflation means rate cuts are probably off the table for a while. And if hiring cools later this year, households may pull back on big-ticket purchases, taking some steam out of overall growth.
All eyes now turn to upcoming retail sales and employment reports, along with any Fed chatter. Those signals will show whether this mid-year peak was a one-off or the start of a more durable rebound.
